Sunday, February 24, 2013

By law, on Friday the executive must begin to cut $85 billion from federal spending. Though, as is his wont, the president is blaming the Republicans for what he claims is a draconian measure. No less a Washington chronicler of events than Bob Woodward of the Washington Post considers that a gross distortion of the truth

[T]he automatic spending cuts were initiated by the White House and were the brainchild of [Treasury Secretary nominee Jack] Lew and White House congressional relations chief Rob Nabors -- probably the foremost experts on budget issues in the senior ranks of the federal government.

Obama personally approved of the plan for Lew and Nabors to propose the sequester to Senate Majority Leader Harry Reid (D-Nev.). They did so at 2:30 p.m. July 27, 2011, according to interviews with two senior White House aides who were directly involved.

Lying about who's responsible is only part of the story; the president, with the connivance of the press, is trying to scare the public about the effects of the necessary cuts and proposes yet another expensive, pointless program.Lucianne.com characterizes the scare effort as threatening: "Dead babies in the water, poisoned milk, catburgers at Mickey Dee's -- anything is possible." That wisecrack's not far off the mark. Here's Debbie Wasserman-Schultz, chair of the DNC.

Well, everything is -- everything would be delayed. You're going to have massive indiscriminate cuts to education, to health care research, you're going to have research grants that won't get funded. I mean, the decisions that we make now, letting the sequester kick in, have short-term effects that affect people's daily lives, but they also have significant long-term effects. If a university isn't able to hire a researcher or -- because the grant doesn't come through -- that researcher never does groundbreaking work that could save thousands of lives later on down the road. I mean, this is dramatically irresponsible. It's irresponsible for our economy and the impact on it. It's irresponsible to, in terms of the impact it would leave on the middle class and working families. The only ones who get protected are the wealthiest, most fortunate Americans. But that appears to be the Republicans' goal. And it's just baffling. How could they possibly continue to only care about people who are already doing really well who are the only ones that would be shielded from the impact of sequester cuts?

It's not as if the trillions in debt racked up by the administration have accomplished much more than feeding Obama's cronies and buying him political support with our money. The examples are too numerous to do the topic justice in this space. Let's review some that even the media has not been able to fully erase from the short-lived memories of a significant number of voters, so that Republicans who need to make a more forceful case for necessary cuts can credibly note the monumental waste.In August of last year, Investor's Business Dailyreported on the cost to taxpayers of the unprecedented bailout of Chrysler and General Motors:

Washington not only used taxpayer money to buy control of General Motors and Chrysler, but it also rewrote the rules on the treatment of creditors.

Superficially at least, the intervention worked, but it hasn't been cheap. GM is back to making a profit, though it is struggling in Europe and once again has lost its No. 1 market share to Toyota. And the perennial problem child Chrysler is now in Fiat's lap.

The administration sold its interest in Chrysler in July 2011, racking up a loss of $1.3 billion. It still holds 26% of GM and is riding the stock price down. With GM shares trading at just over $20, the taxpayer's paper losses are at least $16 billion.

Moreover, for no good reason, the administration coupled wiping out legitimate claims of GM investors and creditors with eliminating thousands of jobs at car dealerships. The National Automobile Dealers Association said this action alone threatened more than 100,000 jobs. That IBD analysis of the cost to taxpayers of the GM bailout may be considerably overoptimistic. Charles Ortel reported this week that preliminary disclosures made by GM the week before, indicate GM is close to bankruptcy:

Looking at available "facts", General Motors today is not technically "dead" -- however, alarm bells are ringing off the hook. In 2012, consolidated Automotive revenues grew by slightly less than 1% from $148.9 billion to $150.3 billion. Automotive gross margin fell from a puny 12.4% in 2011 to 6.7%, in 2012. Operating income before goodwill impairment charges fell from $6.9 billion to an operating loss of $3.2 billion. Pretax income after all charges plummeted from $6.0 billion to a staggering loss of $30.3 billion. Moreover, these consolidated results were produced while the largest unit, GM North America, increased its capacity utilization rate from 95.6% to 97.5%. No manufacturing business is viable at such levels for long and few American businesses have already been as coddled by various governments.

If you cannot sell/lease vehicles when money is essentially free, how can you hope to do so as rates correct back up as they have started to do since July 2012? Analysis that is more complete will have to wait until the first week of March when GM releases its Annual Report on Form 10-K.

Rest assured that informed investors will not be celebrating even if entrenched unions, managers and politicians dare to gloat.

Bailing out a structurally challenged vehicle producer using borrowed taxpayer funds, without fully addressing competitive weaknesses has not restored the fortunes of General Motors.

And then there was the monumental waste on failed green projects, like Solyndra, often owned by Obama supporters and donors.Heritage details the tab for us:

So far, 34 companies that were offered federal support from taxpayers are faltering -- either having gone bankrupt or laying off workers or heading for bankruptcy. This list includes only those companies that received federal money from the Obama Administration's Department of Energy and other agencies. The amount of money indicated does not reflect how much was actually received or spent but how much was offered. The amount also does not include other state, local, and federal tax credits and subsidies, which push the amount of money these companies have received from taxpayers even higher.

With a record like this it is monumental chutzpah to claim only essential services -- like defense and border security -- need to be cut to help stem the red ink.A look at the large number of agencies and departments that make up the executive branch reveals that certainly far more drastic cuts that the Republicans propose could take place without harming essential services.Heritage has also noted some other of the wasteful expenditures of this administration which preposterously argues we can't turn down even a small amount of the cash waterfall.

• A reality TV show in India. The Department of Agriculture's Market Access Program spends $200 million a year to help U.S. agricultural trade associations and cooperatives advertise their products in foreign markets. In 2011, it funded a reality TV show in India that advertised U.S. cotton.

• Studying pig poop. The Environmental Protection Agency awarded a $141,450 grant under the Clean Air Act to fund a Chinese study on swine manure and a $1.2 million grant to the United Nations for clean fuel promotion.

• Amtrak snacks. Federally subsidized Amtrak lost $84.5 million on its food and beverage services in 2011 and $833.8 million over the past 10 years. It has never broken even on these services.

• Using military exercises to boost biofuels. The U.S. Navy bought 450,000 gallons of biofuels for $12 million -- or almost $27 per gallon -- to conduct exercises to showcase the fuel and bring it closer toward commercialization. It is the largest biofuel purchase ever made by the government.

• Conferences for government employees. In 2008 and 2009 alone, the Department of Justice spent $121 million to host or participate in 1,832 conferences.

Waste Book 2012:

1. "RoboSquirrel." $325,000 was spent on a robotic squirrel named "RoboSquirrel." This National Science Foundation grant was used to create a realistic-looking robotic squirrel for the purpose of studying how a rattlesnake would react to it.

2. Cupcakes. In Washington, D.C., and elsewhere across the country, cupcake shops are trending. The 10 cupcake shop owners who received $2 million in Small Business Administration loan guarantees, however, can only boast so much of their entrepreneurial ingenuity, since taxpayers are backing them up.

3. Food stamps for alcohol and junk food. Though they were intended to ensure hungry children received healthy meals, taxpayer-funded food stamps were instead spent on fast food at Taco Bell and Burger King; on non-nutritious foods such as candy, ice cream, and soft drinks; and on some 2,000 deceased persons in New York and Massachusetts. Food stamp recipients spent $2 billion on sugary drinks alone. Improper SNAP payments accounted for $2.5 billion in waste, including to one exotic dancer who was making $85,000 per year.

4. Beer brewing in New Hampshire. Despite Smuttynose brewery's financial success and popularity, it is still getting a $750,970 Community Development Block Grant to build a new brewery and restaurant facilities.

A covered bridge to nowhere. What list of government waste would be complete without a notorious "bridge to nowhere"? In this case, it's $520,000 to fix the Stevenson Road Covered Bridge in Green County, Ohio, which was last used in 2003.

[snip]

Fiscal year 2012 is the fourth consecutive year with a trillion-dollar-plus deficit. Total federal debt has surpassed $16 trillion. Federal spending reached $3.6 trillion -- or 22.9 percent as a share of the economy -- in 2012. Despite these frightening figures, which are on track to worsen, Congress continues to expand government.

Even agencies, which many voters mistakenly believe are essential, are obviously so incompetent that they are not worthy of maintaining as they presently operate. Time to find more workable, less costly alternatives.TSA is growing like Topsy (this year the figure in the budget for TSA is $7.65 billion) and increasingly it is behaving in idiotic ways, absolutely unrelated to sensible security measures. (Why is 9 ounces of a liquid okay onboard only if it is divided into three three-ounce bottles instead of one, for example? Why are 74-year-old passengers exempt from removing their shoes when 73 year olds are not? Why are handicapped persons asked to stand so that the airport owned and operated wheelchairs can be wanded?) This week, we watched a moronic TSA agent terrorizing a wheelchair-bound three-year-old.We are regularly horrified by TSA's nonsensical rules and the officious, unthinking behavior of its agents. Why not let the airports and airlines handle this? It seems the only way to assure polite, efficient screening and true accountability.And then there's FEMA, to give another example even low-information voters might recall. It mishandled Hurricane Andrew, the 2004 Southern Florida hurricanes, Hurricane Katrina, the Duma, Arkansas tornadoes, and now, apparently Hurricane Sandy. Isn't it time to concede the notion that the feds have this large a role to play in dealing with disasters is contrary to all evidence?But instead of offering up some sensible cuts or ceasing to demonize those responsible enough to fight increasing federal programs and spending, our innumerate president offers up yet another grandiose plan to a broke nation. He's doubling down, proposing, even in the face of studies showing limited benefits for our $7 billion Head Start program, expanding pre-kindergarten programs. The Center for American Progress estimates that this initiative will cost an additional $98 billion over 10 years:"This isn't a liberal or conservative thing," said Kirsten Powers, a Daily Beast columnist and Fox News contributor. "I think everybody wants to help our children do better in school (but) this doesn't seem to be the thing that's doing it."

Keep these in mind as you contemplate the direction of the American government over the past 50 years and especially since the Obama election.

The Goals of Communism

(as read into the congressional record January 10, 1963, from "The Naked Communist" by Cleon Skousen)

1. U.S. acceptance of coexistence as the only alternative to atomic war.

2. U.S. willingness to capitulate in preference to engaging in atomic war.

3. Develop the illusion that total disarmament of the United States would be a demonstration of moral strength.

4. Permit free trade between all nations regardless of Communist affiliation and regardless of whether or not items could be used for war.

5. Extension of long-term loans to Russia and Soviet satellites.

6. Provide American aid to all nations regardless of Communist domination.

7. Grant recognition of Red China. Admission of Red China to the U.N.

8. Set up East and West Germany as separate states in spite of Khrushchev's promise in 1955 to settle the German question by free elections under supervision of the U.N.

9. Prolong the conferences to ban atomic tests because the United States has agreed to suspend tests as long as negotiations are in progress.

10. Allow all Soviet satellites individual representation in the U.N.

11. Promote the U.N. as the only hope for mankind. If its charter is rewritten, demand that it be set up as a one-world government with its own independent armed forces. (Some Communist leaders believe the world can be taken over as easily by the U.N. as by Moscow. Sometimes these two centers compete with each other as they are now doing in the Congo.)

12. Resist any attempt to outlaw the Communist Party.

13. Do away with all loyalty oaths.

14. Continue giving Russia access to the U.S. Patent Office.

15. Capture one or both of the political parties in the United States.

16. Use technical decisions of the courts to weaken basic American institutions by claiming their activities violate civil rights.

17. Get control of the schools. Use them as transmission belts for socialism and current Communist propaganda. Soften the curriculum. Get control of teachers' associations. Put the party line in textbooks.

18. Gain control of all student newspapers.

19. Use student riots to foment public protests against programs or organizations which are under Communist attack.

20. Infiltrate the press. Get control of book-review assignments, editorial writing, policymaking positions.

21. Gain control of key positions in radio, TV, and motion pictures.

22. Continue discrediting American culture by degrading all forms of artistic expression. An American Communist cell was told to "eliminate all good sculpture from parks and buildings, substitute shapeless, awkward and meaningless forms."

27. Infiltrate the churches and replace revealed religion with "social" religion. Discredit the Bible and emphasize the need for intellectual maturity which does not need a "religious crutch."

28. Eliminate prayer or any phase of religious expression in the schools on the ground that it violates the principle of "separation of church and state."

29. Discredit the American Constitution by calling it inadequate, old-fashioned, out of step with modern needs, a hindrance to cooperation between nations on a worldwide basis.

30. Discredit the American Founding Fathers. Present them as selfish aristocrats who had no concern for the "common man."

31. Belittle all forms of American culture and discourage the teaching of American history on the ground that it was only a minor part of the "big picture." Give more emphasis to Russian history since the Communists took over.

32. Support any socialist movement to give centralized control over any part of the culture--education, social agencies, welfare programs, mental health clinics, etc.

33. Eliminate all laws or procedures which interfere with the operation of the Communist apparatus.

34. Eliminate the House Committee on Un-American Activities.

35. Discredit and eventually dismantle the FBI.

36. Infiltrate and gain control of more unions.

37. Infiltrate and gain control of big business.

38. Transfer some of the powers of arrest from the police to social agencies. Treat all behavioral problems as psychiatric disorders which no one but psychiatrists can understand.

39. Dominate the psychiatric profession and use mental health laws as a means of gaining coercive control over those who oppose Communist goals.

40. Discredit the family as an institution. Encourage promiscuity and easy divorce.

41. Emphasize the need to raise children away from the negative influence of parents. Attribute prejudices, mental blocks and retarding of children to suppressive influence of parents.

42. Create the impression that violence and insurrection are legitimate aspects of the American tradition; that students and special-interest groups should rise up and use united force to solve economic, political or social problems.

43. Overthrow all colonial governments before native populations are ready for self-government.

44. Internationalize the Panama Canal.

45. Repeal the Connally reservation so the United States cannot prevent the World Court from seizing jurisdiction over nations and individuals alike.